Exam 10: Standard Costs and Overhead Analysis

Standard costs can be used in conjunction with job-order costing but NOT with process costing.

(Appendix 10A)Direct labour efficiency variance can be analyzed further into mix and yield variances if more than one class of direct labour that are good substitutes is used in operations.

Overhead cost is applied to units based on direct labour hours.For April,total overhead cost was budgeted at $80,000 based on a denominator activity level of 20,000 direct labour hours for the month.The standard cost card indicates that each unit of finished product requires 2 direct labour hours.The following data are available for April's activity: Number of Units Produced \ 9,500 Direct Labour Hours Worked \ 19,500 Actual Total Overhead Cost Incurred \ 79,500 What was the amount of total overhead cost applied to production for the month of April?

The Clark Company makes a single product and uses standard costing. Some data concerning this product for the month of May follow: -What was the variable overhead spending variance for May?

Which of the following is NOT true for variable manufacturing overhead costs in a standard costing system?

The Dillon Company makes and sells a single product and uses a flexible budget for overhead to plan and control overhead costs. Overhead costs are applied on the basis of direct labour hours. The standard cost card shows that 5 direct labour hours are required per unit. The Dillon Company had the following budgeted and actual data for March: -What was the fixed overhead budget variance for March?

Lab Corp.uses a standard cost system.Direct labour information for Product CER for the month of October follows: Standard direct labour rate \ 6.00 per hour Actual direct labour rate paid \ 6.10 per hour Standard hours allowed for actual production 1,500 hours Labour efficiency variance-unfavourable \ 600 What were the actual hours worked?

Wattis Manufacturing has established the following master flexible budget: Variable expenses: Raw materials \ 220,000 330,000 440,000 Direct labour 240,000 360,000 480,000 Manufacturing overhead 180,000 270,000 360,000 Selling and administrative Total variable expenses Fixed expenses: Manufacturing overhead \ 337,500 \ 337,500 \ 337,500 Selling and administrative Total fixed expenses \ \ Total expenses $\quad$ $\$ 1.327,500 \quad \quad\$ 1,697,500$ $\quad$ $\$ 2,067,500$ Manufacturing overhead is applied on the basis of machine hours. At standard, each unit of product requires one machine hour to complete. Required: a) The denominator activity level is 150,000 units. What are the predetermined variable and fixed manufacturing overhead rates? b) Actual data for the year were as follows: Actual variable manufacturing overhead cost \ 211,680 Actual fixed manufacturing overhead cost \ 343,000 Actual machine hours incurred 126,000 Units produced 120,000 Compute the variable overhead spending and efficiency variances and the fixed overhead budget and volume variances for the year.

Which of the following is directly associated with a higher denominator level of activity?

The Ferris Company applies manufacturing overhead costs to products on the basis of direct labour hours. The standard cost card shows that 3 direct labour hours are required per unit of product. For August, the company budgeted to work 90,000 direct labour hours and to incur the following total manufacturing overhead costs: During August, the company completed 28,000 units of product, worked 86,000 direct labour hours, and incurred the following total manufacturing overhead costs: The denominator activity used for the predetermined overhead rate was 90,000 direct labour hours. -For August,what was the fixed overhead volume variance?

At Overland Company,maintenance cost is exclusively a variable cost that varies directly with machine hours.The performance report for July showed that total actual maintenance costs were $9,800 and that the associated spending variance was $200 unfavourable.If 8,000 machine hours were actually worked during July,what was the budgeted maintenance cost per machine hour?